When I was a business reporter, I spent a lot of time covering health care. From a business perspective, health care is fascinating, because just about everyone is uncomfortable with the fact that it costs money.
In fact, people are so uncomfortable with the fact that health care costs money that we Americans have invented a little myth for ourselves: In other countries (far, far away in Foreignia--and especially Europe) health care is free.
It's free! Just like that! It's magical and free and provided by elves or hobbits or maybe those guys who ride around the French countryside on bicycles wearing berets and carrying loaves of bread in their basket.
Amazing, isn't it? And completely untrue. Of course health care costs money, in Europe and everywhere else. People in other countries just pay for it in different ways than Americans do--they primarily pay for it through taxes instead of through employer-sponsored insurance.
Now, we can certainly question whether or not employer-sponsored insurance is the best way to pay for health care, and we can talk about other ways to pay for health care, but the fact remains: Health care has to be paid for.
Ditto grocery bags. (Did I just confuse you? Hang on, this all ties together.) Around here people have been considering laws to add a fee to or to altogether ban plastic grocery bags. And the opponents of these measures say, Hey, poor people can't afford to pay for grocery bags!
But of course poor people are already paying for grocery bags--your grocery store pays for the plastic bags and passes the cost along to customers (including poor customers) in the form of higher prices for groceries. In fact, the companies that sell plastic bags to grocery stores make so much money that they can afford to spend quite a lot of it funding opposition to fees and bans on their product!
Ditto publishing services. Yeah, I've spent money to self-publish. You do. And while I think there are ways to make your start-up costs way lower than mine (do you really need a Website right off the bat? a paper book?), the fact is, this is a business that requires an initial investment. Publishing always has--it takes a lot of time (and time is money) to write a book in the first place.
But I know what I've spent. I spent $280 to copy edit Trang. He did a great job. So, guess what? I never have to spend another penny on that.
Compare that to the traditional publishing model, where even if your sales are being accounted for accurately (and there's no guarantee of that), your costs are potentially infinite. The more books you sell, the higher your total costs, because you are paying a percentage of your sales.
When you read how someone like J.K. Rowlings or Stephenie Meyer is worth a bazillion dollars* to their publishing house, that means that, in exchange for those publishing services--line editing, copy editing, layout, proofreading, cover art, printing, formatting, distribution, marketing--they have paid their publishing houses a bazillion dollars. (And we laugh at the people wanting $100,000.)
Was it up-front costs? No. Did it work out for them? Sure! Was it free? Oh, hell no.
* OK, fine, "a bazillion" isn't very specific. According to this, when Meyer's Twilight sales began to dwindle in 2010, the effect on the parent company Lagardere was that...let me do the math...their revenues fell by 48 million euros. Which is...$63 million. So Meyer alone basically paid her publishing house $63 million in 2009...oh, yeah, that's actually for only three months in 2009. And she was still selling some Twilight books in 2010, so she's actually paying them more. (Is she coming out ahead? Well, Forbes estimates that Meyer made $21 million between May 2010 and May 2011, so while she's not poor, she's making a lot more for Lagardere than she is for herself.)
Do you understand now how Joe Konrath can make $75,000 a month?